The simplest form of bill payment and processing involves the generation of a paper bill indicating the necessary information required to accomplish the bill payment transaction. The term "bill" will be understood to include periodic, such as monthly, bills, and non-recurring bills, such as invoices. The paper bill typically identifies the biller. The term "biller" is used to identify a party, such as a merchant or utility or service provider, who has performed services or provided goods and is seeking appropriate compensation therefor. The "biller" is also referred to as the "payee" since it is the recipient of the funds transferred during the bill payment process. The paper bill also identifies the "billee" or "payor", i.e., the party to whom the bill is directed and from whom payment is expected. The bill also customarily includes one or more additional items of information, such as the amount of the bill; payment terms; due date; finance charges and penalties; and itemized charges reflected in the billed amount. Of course, other information may be provided as well.
To effect payment of a paper bill, the billee customarily returns the bill (or a portion thereof) to the biller, using mail delivery or the like, along with payment in the form of a check or money order, or credit or debit card authorization. The payment is then received by the biller and processed. In the case of payment by check, bill processing includes handling the paper bills and checks received; depositing the checks in the biller's bank account; keeping track of whether each check is accepted (cleared) or rejected by the biller's bank; and crediting the biller's account in the amount of the cleared check. While payment by money order or debit or credit card is somewhat less complex, problems nonetheless exist.
The above-described paper-based bill payment system suffers from several disadvantages. First, the preparation and mailing of paper bills by the biller is expensive and time consuming. Second, there is oftentimes a significant delay before the bill is received by the billee. In fact, it is not uncommon for the bill to be lost altogether in the postal system and never received by the billee. This situation is extremely deleterious and frustrating for both biller and billee. For the billee, eventual payment is delayed until the situation is discovered and properly addressed. For the biller, it may lead to the unnecessary imposition of late fees, finance charges and a negative credit history, with the biller being under the mistaken impression that the billee is purposefully being delinquent in paying the bill.
A third disadvantage inherent in a paper-based bill paying system is that a significant amount of time, effort and expense must be expended by the billee in making bill payments. The paper bills must be organized, and checks must be written and mailed back to the biller. Additionally, proper postage must be affixed to the return payment. A fourth disadvantage of this system is the complicated processing of payments by the biller. Receiving payments, depositing checks and crediting billee accounts is often a time consuming and needless expenditure of resources. However, all of these disadvantages are unavoidable due to the practical limitations of a paper-based billing system. Even the use of written credit or debit card authorizations only partially address these problems.
One alternative to paper-based bill payment is the use of preauthorized automatic bank withdrawals. In this type of system, a billee notifies his bank, identifies particular billers and authorizes the automatic withdrawal of funds in amount equal to each bill submitted by that particular biller. Although this system is somewhat simpler from the point of view of the billee, it nevertheless has significant drawbacks. Among these drawbacks are the fact that the identification of billers and authorization of automatic withdrawal is typically accomplished by completing a paper form for each biller. Additionally, the system is limited to those participating billers which have an established relationship with the automatic withdrawal banking system. Moreover, in this system, the billee is usually not aware of the bill amount until the automatic withdrawal of the bill amount has been completed.
Yet another alternative bill paying system allows billees to pay bills using a telephone. In this type of system, each biller and billee is identified by way of a unique biller identification number. To pay a bill, a billee calls a bill transaction center or clearinghouse and enters his billee identification number. After the appropriate initialization and verification procedures are performed, the billee uses the telephone touchtone numeric keypad to enter the biller identification number corresponding to the particular bill to be paid. Again using the touchtone keypad, the billee enters the amount of the bill to be paid, with the last two digits determining cents amount and the remaining digits determining the dollars amount. A special key, such as the "*" or "#" key, is then used to confirm the amount and authorize payment of the bill.
Again, this telephone-based bill payment system suffers from several disadvantages. First, the system is limited to the payment of bills issued by those billers which are preregistered with the billing system.- Second, the system is cumbersome from the user's point of view in that billees are required to maintain and have at their ready disposal a list of billers and associated identification numbers. Otherwise, the particular biller cannot be identified and the bill payment cannot be carried out.
In order to overcome some of the deficiencies inherent in the above-described bill payment systems, more recent bill payment systems have been developed which utilize voice recognition technology. In one such system, the billee speaks the name of the particular biller whose bill it is desired to pay. The billee's speech is captured and analyzed to determine the intended biller. In this way, the billee is no longer required to maintain a biller identification code in order to perform bill payment. Although the user interface in this type of system is improved, the remainder of the system in inflexible in that the universe of permitted billers is still limited to those who have registered with the system. Typically, these systems allow for bill payment only to major national billers. If the system is configured and initialized differently for each geographic region, then the dominant, local billers in each geographic region may be included in addition to the national billers.